EU Call for Evidence on the Impact of the Inducements and Charges Disclosure Requirements Under MiFID II
07/17/2019The European Securities and Markets Authority has launched a call for evidence on the impact of the inducements and costs and charges disclosure requirements under the revised Markets in Financial Instruments Directive. MiFID II restricts the payment or receipt of all fees, commissions and non-monetary benefits (which are defined as so-called "inducements") unless these enhance the quality of service provided to a client and do not impair an EU investment firm's duty to act in the best interests of its client. EU investment firms are obliged to disclose to each client all fees, commissions and non-monetary benefits received by them in connection with any investment service provided by them to that client.
The European Commission must report before March 3, 2020 to the European Parliament and Council of the European Union on the impact of the inducement disclosure requirements. It has requested advice from ESMA on both inducement and costs disclosure requirements, as well as on the application of the rules by Member States and the extent, if any, that those rules differ between Member States, on the impact of the rules on professional and retail clients and the extent to which investors have benefitted from the requirements. ESMA is seeking input from market participants to assist it in preparing advice to the Commission. Responses to the call for evidence should be provided by September 6, 2019.
View the consultation paper.
You may like to view our client note, "MiFID II, Research and Extraterritoriality: The SEC, European Commission and FCA Solution".
You may like to view our client note, "Underwriting or Placing Fees, Corporate Finance Contacts and MIFID II".
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